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Financial Conversations with Fitz #2 - Post Harvest Marketing and 2009 - 12/15/2008

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Great weekend of Iowa Winter.  Weather about as variable as the markets both for Ag and the Dow.  We need to be sure to keep checking our grain once a week for hot spots.  It is not in good condition when it went in so we need to keep close watch.  Be sure to take out the middle if condition lessens as you deliver it to the market.

I have attended several meetings in the last two weeks for marketing, cash flow of next years crops, and government programs.  The new farm bill has several new twists we need to be aware of.  SURE, ACRE, and DCP that we have had.  Be sure to check out the newsletters and information meetings being held by the FSA.  Crop certification of acres is due today, December 15th.  It looks like the revenue portion of the insurance programs certainly merit running the figures.  ISU's Don Hofstrand has develeoped a calculator to run the ACRE program.  Take a look at it under the Ag Decision Maker program.  You can just google AGDM.  While you are there, be sure you check out the crop calculators also.  You can run each entity of corn or beans.  They have different set ups for corn - corn or beans - beans.  I have mentioned before the importance of running your own figures - don't use ISU's, but your own.  The 2009 crop year will certainly be a challenge for making a profit.  Know where you stand before you go to the banker or supplier.  Soil testing and gridding will be important. 

There seems to be a little carry in the market, so generate your cash when you know you will need it.  Don't be paying interest if you have grain sitting at the elevator paying storage.  The carry in the market isn't enough to cover both interest and storage. 

Listened to two porgrams on ethanol this week.  It still looks like a tough go fo rhte short term for ethanol plants.  Once the shake up is finished it should improve long term.  Lots of ethanol coming into the Florida market from Brazil.  Encourage your friends and neighbors to use ethanol.  Visit with your legislators before they go to Des Moines also.

The old days of working hard on your farm are gone.  Your success depends on so many outside factors.  A quote from one of the meetings was:  "The way the world does business has changed dramatically the last five years - how have you changed your operation?"  Will visit about this again next week for some more thoughts.

Call or stop in to see us if you have any questions in any of our three offices.  Get to a Christmas program at your school or church or community - you will feel better!

Remember that you should deal with people in community banks and organizations.  When you work with them, you know that you will also see them sitting with you at ball games, church, of community events.  So, if in doubt, give us a call!